Italy PM Monti rules out new budget measures

Reuters Staff

3 Min Read

ROME (Reuters) - Italy will not need any supplementary budget measures to ensure that it meets its target of a balanced budget by 2013, Prime Minister Mario Monti reiterated on Thursday after a European Commission forecast pointed to a deep recession this year.

“We’ve set cautious projections, the objective of a balanced budget in 2013 remains in place and we don’t need any new fiscal package,” Monti told reporters after a meeting with Spanish Prime Minister Mariano Rajoy in Rome.

The European Commission forecast on Thursday that Italy’s economy would contract by 1.3 percent in 2012, much more than the government estimate of a 0.4 percent decline but roughly in line with forecasts from the Bank of Italy and many private economists.

Monti’s government passed a package of more than 33 billion euros (27.9 billion pounds) in tax hikes and spending cuts last year and has repeatedly ruled out new fiscal measures, saying the focus in Europe should be on boosting growth.

Monti said a deregulation bill currently going through parliament would stimulate growth in the euro zone’s third-largest economy and no new steps would be needed despite the new forecasts from Brussels.

“Are we going to change our structural policies for growth? No,” Monti said. “We don’t see any need to introduce additional measures to help growth.”

Parts of the package intended to boost competition, affecting professional groups such as taxi drivers and pharmacies, have been watered down in parliament in recent days.

Under the latest revisions, the responsibility for assigning taxi drivers’ licences, which was originally intended to be given to a central authority, could be retained by city mayors who are considered more vulnerable to pressure from local taxi lobbies.

There has also been strong resistance to moves to remove rules setting minimum fee levels for professions like lawyers and notaries.

Monti said a certain amount of discussion with affected groups was inevitable but there were limits to what the government was prepared to accept.

“There will be modifications we can accept, and they’re not all backtracking, but there are others we can’t accept,” he said.